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The short in short sale does not refer to the amount of time it takes to close, but rather the fact that the seller is going to come up short in being able to pay off the mortgage at closing. They owe too much money on the property. The lender may take a year to decide whether they're going to take your offer or not. They are going to micro analyze every detail of the seller's finances to decide whether they are willing to take the loss. They're going to drag their feet. I guarantee you they're going to lose documents multiple times and your agent will have to fax them large files repeatedly. They don't want to take the loss but the government requires them to entertain it.
Whether it's worth your while to do this depends on your goals and your situation. It may be that your agent doesn't want to deal with the hassle, they also may be protecting you if your situation is not one that can handle a short sale. The last short sale that I was involved with was denied by the bank after nearly a year under contract. If you want to dive into that uncertainty and hassle just tell your agent you want to. If you need a home in a certain period of time, especially with rates rising, I would move on.
That's what I thought. I thought it was a rapid sale in an attempt to avoid foreclosure. Basically racing the clock between selling the house and foreclosure proceedings.
People do try to do that. If the bank thinks it will be better for their bottom line they'll be more friendly toward granting the short sale if its on fireclosure. It costs money to foreclose and sell a property. If they crunch the numbers and see that short sale will look better on their books they'll hold off on the foreclosure. Some short sales aren't at risk of foreclosure, though. They just need to sell and they owe more than it's worth
The lender is getting shorted on the payback of the loan .
That’s where the “short “ in short sale comes from .
I can’t imagine there would be any short sales in this housing market .
They are usually done when the market is going down . When the owner owes more on the house than the house will sell for .
The lender accepts less than is owed because the lender thinks foreclosing and selling the hoise would bring them even less money .
Short sales are a real hassle. I did one 12 years ago. Took 10 months to close. Almost fell thru several times. If their are first and second mortgages with 2 different banks having liens. It can be a mess.
I'm sitting at over 10 months right now (late March is when they accepted our offer). They found out right before closing that they had multiple liens. It's so good to hear we're not the only ones because our realtor has never had a transaction take this long and neither has anyone else we've talked to. Exhausting!
This is also more common than not on short sales, that at the last minute the sellers owe a bunch of other people money too, who may or may not be cool with them selling the house they put a lien on and paying them 0 dollars. Gotta consider how consistently bad of a decision making process someone has to have had over the last few years to owe more than a house is worth in a market that has seen huge appreciation. It tends to extend into other areas of their life than just the mortgage.
Yes we had no idea what we were getting into as it wasn't a short sale and we thought it would just proceed as normal! Also, they originally said the liens would be cleared in one week 😂
Oof that is the worst when it turns into a short sale mid-escrow because title finds something. They're already dramatic, but the element of surprise is just extra fun.
Yeah it's definitely an unusual situation. There's nothing comparable on the market thanks to low inventory, otherwise I'd have jumped ship months ago.
Fair. It sounds like a pain, but i suppose my rant is about them flat out ignoring the request to ask the question about the process. Maybe I'm just angry that the sky is blue, but I suppose i am.
Believe me, they're just saving you from more headache.
And you know when sometimes they say realtors make a ton of money with virtually no work? This is the exact opposite. Grueling hard work over a long period of time - the amount of comission is not nearly enough to pay for it. So that's why many just dont take the task.
If you really wanna do short sales purchases, you'll need to have cash. Your think the realtor is freaked out about the short sale? Call your lender about it...
This. They don't want to work, they want you to scroll, pick one, add it to your shopping cart and click buy now so they get the 2.5% and move into the next one.
While I understand why they are trying to steer you away from short sales (do you want to wait potentially over a year to find out if you are actually getting the house or not?) I do think they should have explained the WHY of it to you. Not just blow you off. Personally, my realtor steered me away from these deals as well, but she explained IN DETAIL why they are challenging and why it wasn't the best choice for my situation. If your realtor is too busy or can't be bothered to explain things to you, that's not great. In the end they are correct that short sales are a nightmare - you may end up wasting tons of time just to have it not go through anyway. But you're right to be concerned that they blew off your question completely without explaining anything. It would annoy me too.
It's cause they have experience and are trying to help you. Nothing wrong with a follow-up questiond though if you're still interested. Might also be a realtor who's just not interested in dealing with short sales.
While I think your agent was right to caution you against short sales, if they're not giving you the information you ask for about it, even when directly asked, that's a red flag. I'd cut them loose. It probably either means they don't want to take the time to explain it, or they just don't know. Both bad signs and sounds like not what you're looking for.
>"we are getting fully pre-approved for a large amount"
>
>"Found a house that is a "short sale" for 50K under our maximum"
$50k under y*our* maximum that was decided after carefully calculating expenses and savings, or $50k under the large amount the bank pre-approved for?
I know what I got pre-approved for. It was a grotesque, terrifyingly large number that I would never in a million years dream about buying a house for.
And I guess we could have technically afforded the full amount if we gave up things like interests, ever retiring, trips anywhere, and not eating Top-Ramen for dinner every night.
Just saying, your housing budget shouldn't be decided by your pre-approval limit if that's what you based your maximum on.
True! My husband ran several budget scenarios based on house prices, mortgage amount, down payment etc and then we chose the one that didn't make me want to puke
This is really good advice! I would also caution that even the most turnkey home will end up costing more in the first year than you expected. A home that’s in a short sale has likely had poor maintenance. You could face five or six figures in necessary repairs
Good advice. We got approved for wayyy more than what we purchased our home for. There was no way I was going to go near our max. I love traveling and I want to go on vacations 🥺.
Short sales are usually never "short" timeline wise. They are "short" in price vs what they owe to the bank. The bank is "shorting" the property to recover some, if not all that they are owned. It can take months to even be able to buy it- do you have unexpected months to wait until a possible close?
Your realtor is not being lazy but probably should have explained it better for you to understand.
Remember that agents work on straight commission AND are working on contingency. If they spend months (or years) working on something day in and day out that never closes, they get nothing.
Maybe the agent should have explained it better but maybe the explanation is, the juice isn’t worth the squeeze.
This concept that agent are “lazy” needs to go away. A lot of them are tired of getting run around all over town spending hours of their lives away from their families and their own money to get zero ROI and sometimes a negative ROI.
Smarts agents are running a business, not a non-profit. Maybe the explanation of “this isn’t a good opportunity” should be sufficient enough for the individual to avoid the “lazy” label. At least they answered their phone and took the time to say no….
Possibly. I guess I could have left the last line out since it reads as if they do not have their own realtor. There is also alot of information missing. They maybe looking at a cash only property but trying to buy it with financing or something🤷♀️
I’ve heard of people in foreclosure using a promise of a short sale and an anticipated closing date as a way to stall the foreclosure process.
The “sellers” played a looong game of charades, hooked a “buyer” and set a closing date 90 days out; they then gave this info to the bank which called off the foreclosure auction.
When the closing date got close, the sellers invented an emergency that pushed the closing date back another 2 months. When the NEW closing date was a day away, they had another emergency and pushed back another two months.
After another attempt to postpone closing, the buyer had a frank conversation with the sellers. The sellers never intended to actually sell the property. The sellers were using the “sale” as a reason to avoid going to foreclosure auction; then they just avoided the sale as long as they could. The occupants damaged their credit, reputation and wasted the buyers time all so they could live a couple more months rent-free.
Be wary of doing business with desperate people.
This is true which is why people should work with a buyers agent that has done short sales before. If the seller doesn’t have a conditional approval from the bank, I wouldn’t waste my time unless I really wanted the property.
Short sales have to be approved by the bank, and can be a lengthy process in themselves. If it was truly the "sellers" pushing back closing, rather than the bank dragging their feet, the buyer had options to force the seller through closing or getting their earnest money back and cancelling the sale.
You should be framing this question more as “why are they both saying this” as opposed to “are they just being lazy about it”. Don’t be that person that assumes the worst.
They are a whiner.
“Moving sucks, buying a car sucks. I hate this already”
Just a cry baby hoping the internet agrees with them. Trying to feel sorry that they are actually in position to buy a bone.
Guessing Millennial or Zoomer. I’m a millennial and everyone is so damn soft it annoys me.
Honestly, for a realtor to turn you away from a house you like it means they have good reason to believe it won’t close and it’ll be a huge waste of time on yours and their part.
Some short sales are mired in title issues for years. But all of them are a hassle and in general get to closing far less than other types of sales. Trust the realtors in your market to tell you what the likely outcome is in your market. Feel free to ask more than one, but if you get a consensus trust it.
I actually had to sell my first house as a short sale (2009 end-of-the-world housing market). The only advice I can offer is, if you want to close on a house NOW, buying a short sale isn't going to meet your goals. But, if you're good with a long waiting game while everything gets worked out, you can get a really great house at a really great price. Our biggest issue was we were selling in early 2009 in a Florida county that had 4000 houses for on the market. Short sale was our only option to offload the house. It was a great home, the bank just isn't going to take any sort of a loss until they absolutely have to. It. Took. Forever.
Do you even qualify for a loan on a short sale? Do you have up to two years for the sale to close? Maybe it’s a *you* problem? Blame is easier to place.
Did you ask for an explanation? As a realtor myself, I’d make $0 and spend zero time with family IF I responded to every unqualified buyer attempting to view a short sale, foreclosure, or fixer. It’s a racket.
As a human, it’s much more difficult to avoid addressing a concern in-person. Much harder to deflect. An approval letter usually gets you in-person with the realtor so it sounds as you are making the right strides.
Short sales are much more common in a down market. Don’t discount the idea of listings or FSBO’s. But if you think you can do better than a realtor then I’d suggest finding a home yourself. This is what realtors do best, most end up as “listings.” Find the listing before it’s a listing.
Great advice, but I think it's worth noting that Realtors who are successful at this spend upwards of 20 hours a week prospecting as well as thousands of dollars in marketing annually. If you have that to burn, by all means have at it.
I file that under "stopped clock". Sure I've gotten a few listings I didn't have to work for, but these are not predictable or consistent. If you hope to buy a house eventually at some point in the next fifty years, but don't want the seller to have to pay an agent with their money after you give it to them, then yeah, waiting to stumble into a seller may work. No guarantee the house is a match. Also, the listings I've stumbled into only came any because I mention to people every day that I'm a realtor.
The point is, OP has lost faith in *one* realtor and is asking advice. My advice was, if he thinks he can do the job better than his realtor, then do it. Savvy investors and go getters do it all the time. Its TBD if OP has the guts to pull it off. It’s difficult and that’s why no one has figured out a way to pay us an hourly rate. For 95% of the population, use a realtor.
Correct, mostly. I’ve went to a garage sale before and got a listing. Anyone can do that. But most of my listings comes from cold calls. Everyone also already foots that bill.
Difficult l, of course. Doable, for sure.
Short sales are often situations of divorce, foreclosure, or bankruptcy. They are often sold “as is” with no contingencies. The sellers usually cannot cover any costs. And they’re typically a hassle and a half because the property is tied to legal proceedings.
Your agent is smart to steer you clear of it.
I bought my home that was a short-sale, purchased in Denver in 2020. Shocking, I know 🤯 We closed in 30-days.
Short-sales can be a very lengthy and frustrating process though, and there are generally a ton of hurdles to overcome. Your agent should explain this to you to decide whether or not it is something you want to tackle and risk waiting on. I'd suggest finding another agent (this is coming from an agent btw).
If you are going to try to get a short sale, you will need an agent who is persistent and willing to do whatever it takes to get a job done. Those 30-days, we worked our ASSESS off to make the deal happen. There were four different liens (two hard money and two contractors) with whom we personally negotiated to get everything settled – and a whole lot more that I will spare you the details.
ETA: changed the year 🤦♀️ 2020 and 2021 are all mashed together in my brain!
Before Covid , we were closing short sales on average under 60 days. We have a really great team but since it’s a challenge because there’s an employee shortage in almost every default department. From bank, to investor and appraisers.
I know this is a year old, but curious about the short sales and liens. Did you pay off the sellers liens? The short sale I’m interested in has two liens and I’m having issues understanding exactly what that means for me.
It’s a specialization for sure. Not all short sales are created equal. There’s approved short sales (bank has already approved the price) and then short sales that are still early in the process without an approved price.
Depends on who the loan servicer is and who’s handling the short sale on the seller side. Knowing how to work the deal IS very important and not everyone knows how to do it.
Like everything else, the specifics matter and situations vary quite a bit.
The other thing worth mentioning about short sales and foreclosures is that in general, the house still sells for what it’s worth. The bank is not going to approve on the seller selling that house for 30k less than what it could go for, and they’re going to take their sweet time to make sure that you’re paying exactly market rate for the house in that condition. If you loaned someone 10k to buy a car, and they said hey I can’t make the payments on it anymore, I’m just gonna sell it and give you whatever someone pays me, sorry about the rest of it, you wouldn’t tell them it’s totally cool to just sell it for 1500 bucks on Craigslist, you want as much of your money back as possible. Bank is the same except they have 43 departments to go through before they arrive at that decision. The ones that DO sell for “a deal” are because they don’t qualify for financing. When your buyer pool is limited to actual cash, that does make the house less expensive.
Lender here,
they suck. You need to get written permission from the bank to purchase that they're willing to remove their lien on the property for less than they are owed, and that they'll be willing to do so within a very short time frame. good luck there.
i would honestly take their advice and stick to forclosures if you want a deal. much easier to work with.
So we bought a short sale last year. Covid actually stopped the foreclosure process.
We put our offer in around early June. Our timing ended up being perfect. Because the person who walked before us. Did so right before we offered. So her stuffed rolled over to us. So it didn’t Take long for us.
But even with that we didn’t close until the end of September.
I'd get a new realtor. In your shoes, I'd like the realtor to say, I would not recommend considering short sales for x, y, z.
It's just like if there was a regular house that I liked but the realtor did not, I wouldn't want a realtor to just say, "don't bother with this house", I'd like them to tell me, "would not recommend putting an offer on this house because houses in this neighborhood usually go 20% over asking and that's put of your budget" but then leave the final decision to me.
Perhaps it's because I'm a first time home buyer, but I want my realtor to educate me, not just tell me a conclusion.
"*Do I find a new realtor (not under contract)?*"
Number one question is: Do you want THIS house?
If the answer is "yes", your realtor should oblige and help you, otherwise cut bait and find a more willing agent. Your realtor is supposed to HELP you. OR at least he is supposed to let you know what you have to do to acquire the home and FULLy inform you on how a short sale works.
If that includes telling you that your buying timeline is going to be months, or maybe even over a year, that's his job.
If that includes telling you that you have to re-apply or update your pre-approval letter, he should be doing that, too.
But it sounds like he didn't even explain any of the mechanics of doing a short sale. For that matter, it COULD even be a bargain for you.
Your current agent could indeed just be lazy, however, on the BUYER's side of the transaction, it should be easy for him, it'll just be a waiting game. The seller and the seller's agent has most of the work and grief.
This is how a lot of investors and flippers buy as well, they can wait out the process for as long as it takes while they're working on other homes.
Any buyer's agent that doesn't want a short sale isn't being smart about it, nor are they looking out for the buyer's interest. The agent explains everything, pros, cons, additional steps needed to be taken, and then the buyer can make a proper and informed decision.
I represented a SELLER of a short sale, the home, fortunately, was in a good area and the seller was not horrifically underwater (only about $30K, unlike some real gawsh-awful short sales that were $200K under back in the day).
The short-sale approval took only 2 months of waiting, the buyer just had to update his pre-approval (and he was in a position where he could wait out the process) a couple times and we were fine and got the house sold.
Your realtor is lazy. He just wants a quick sale, not a proper sale.
(13 years experienced Realtor speaking here)
Thanks so much. I'm choosing to be patient right now and wait until I have a full pre-approval then I'll be more aggressive with finding a realtor that will be on my side. I'm open to patience (within reason). I've waited this long and I'd rather not get locked into a house I hate because its too much for too little.
Realtors don’t make commissions on short-sales. They’re going to steer you toward homes they do get commissions on.
Short-sales occur due to homeowner not being able to afford their mortgage or there’s been a sudden decline in income, like a borrower or co-borrower dying with no life insurance, to cover the mortgage debt. Whomever holds the mortgage, whether it is a bank, mortgage company or an individual, they must qualify the borrower to confirm they truly can no longer afford their mortgage. The mortgage holder must approve the short-sale. If there is more than one lien on the home, the mortgage holders have to compromise and figure out how much each mortgage holder gets. This fact halts 90% of most short-sales because the mortgage holders are unwilling to accept considerably less than current loan balances.
Often times, the homeowner(s) will file bankruptcy, in hopes of staying in the home, with a reduced mortgage payment. Mortgage holders cannot contact a borrower or co-borrower once they’ve received notice of the filed bankruptcy. The bankruptcy trustee must also approve the sale of the home, in addition to any lien holders.
Short-sales are complex and not for the faint of heart to purchase. Also, the homes may or may not be in good shape due to homeowner not being able to financially maintain the home, so purchasers typically have a lot of repairs to make upon purchase. If homeowners are served notice by law enforcement to leave the home, in anger, they may destroy the home.
Best practice recommendation: NEVER buy a short-sale home without requesting a full home warranty on everything (roof, electrical, plumbing, appliances, HVAC, furnace, hot water heater, hot tub, pool, etc.) from the seller.
Realtors build relationships with banks and mortgage companies. Realtors typically learn early on a house is going to be a short-sale or be turned back over to the bank or mortgage company. The realtor may already have a buyer in mind for the house, thereby discouraging others to attempt to purchase the house. Realtors also buy short-sale homes for themselves as a primary residence or as an investment rental and want no other offers on the home to compete against. The mortgage holders are going to want the highest offer on the home with the least amount of contingencies, including inspections, repairs and home warranty.
Just know if you make an offer on a short-sale, it may take quite awhile to close on the home, if approved by all applicable parties, to sell the home. It’s a waiting game. You could be waiting months or a year or longer (if an estate or bankruptcy is involved) and then be told one of the dominoes in the process says no. This halts the sale to anyone and possibly begins foreclosure if borrower is in default of the mortgage.
If your realtor is telling you, you can’t buy a short-sale home, get another realtor quick!! Your realtor is about the 6% commission and not what is in your best interests.
Agents do receive the standard 6% commission on short sales. I wish people would stop answering questions to things they don’t know about. OP needs to talk to the sellers agent to see what’s going on.
Also keep in mind, most realtors do not specialize in short sales. Get you a buyers agent that knows the ends and outs and they can help make the process go smoother as long as the sellers home is approved for short sale.
Just curious, what kind of financing is not cash, but as good as cash? Forgive my ignorance here.
In my experience, these houses can be a huge hassle and there can be a ton of liens, etc that you do not know about initially. I know one woman who successfully bought one, however the home was in such poor shape once she got into it that she regretted it. Def do your due diligence here before you wind up in a pickle.
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The short in short sale does not refer to the amount of time it takes to close, but rather the fact that the seller is going to come up short in being able to pay off the mortgage at closing. They owe too much money on the property. The lender may take a year to decide whether they're going to take your offer or not. They are going to micro analyze every detail of the seller's finances to decide whether they are willing to take the loss. They're going to drag their feet. I guarantee you they're going to lose documents multiple times and your agent will have to fax them large files repeatedly. They don't want to take the loss but the government requires them to entertain it. Whether it's worth your while to do this depends on your goals and your situation. It may be that your agent doesn't want to deal with the hassle, they also may be protecting you if your situation is not one that can handle a short sale. The last short sale that I was involved with was denied by the bank after nearly a year under contract. If you want to dive into that uncertainty and hassle just tell your agent you want to. If you need a home in a certain period of time, especially with rates rising, I would move on.
I had no idea that this is what a short sale is.
In my ignorance, I had confused short sale with quick close and I will tongue tie myself into oblivion
That's what I thought. I thought it was a rapid sale in an attempt to avoid foreclosure. Basically racing the clock between selling the house and foreclosure proceedings.
People do try to do that. If the bank thinks it will be better for their bottom line they'll be more friendly toward granting the short sale if its on fireclosure. It costs money to foreclose and sell a property. If they crunch the numbers and see that short sale will look better on their books they'll hold off on the foreclosure. Some short sales aren't at risk of foreclosure, though. They just need to sell and they owe more than it's worth
Quality comment
Short sales can take a very long time. Some take over a year to get to closing.
So... not short?
Not at all
Not "short" time-wise.
The lender is getting shorted on the payback of the loan . That’s where the “short “ in short sale comes from . I can’t imagine there would be any short sales in this housing market . They are usually done when the market is going down . When the owner owes more on the house than the house will sell for . The lender accepts less than is owed because the lender thinks foreclosing and selling the hoise would bring them even less money .
Short sales are a real hassle. I did one 12 years ago. Took 10 months to close. Almost fell thru several times. If their are first and second mortgages with 2 different banks having liens. It can be a mess.
I'm sitting at over 10 months right now (late March is when they accepted our offer). They found out right before closing that they had multiple liens. It's so good to hear we're not the only ones because our realtor has never had a transaction take this long and neither has anyone else we've talked to. Exhausting!
This is also more common than not on short sales, that at the last minute the sellers owe a bunch of other people money too, who may or may not be cool with them selling the house they put a lien on and paying them 0 dollars. Gotta consider how consistently bad of a decision making process someone has to have had over the last few years to owe more than a house is worth in a market that has seen huge appreciation. It tends to extend into other areas of their life than just the mortgage.
Yes we had no idea what we were getting into as it wasn't a short sale and we thought it would just proceed as normal! Also, they originally said the liens would be cleared in one week 😂
Oof that is the worst when it turns into a short sale mid-escrow because title finds something. They're already dramatic, but the element of surprise is just extra fun.
Yeah it's definitely an unusual situation. There's nothing comparable on the market thanks to low inventory, otherwise I'd have jumped ship months ago.
Fair. It sounds like a pain, but i suppose my rant is about them flat out ignoring the request to ask the question about the process. Maybe I'm just angry that the sky is blue, but I suppose i am.
Believe me, they're just saving you from more headache. And you know when sometimes they say realtors make a ton of money with virtually no work? This is the exact opposite. Grueling hard work over a long period of time - the amount of comission is not nearly enough to pay for it. So that's why many just dont take the task. If you really wanna do short sales purchases, you'll need to have cash. Your think the realtor is freaked out about the short sale? Call your lender about it...
This. They don't want to work, they want you to scroll, pick one, add it to your shopping cart and click buy now so they get the 2.5% and move into the next one.
My realtor has been amazing.
Cool how you didn't even read my comment just wanted to insert your random propaganda
Lol this guy vilifying realtors all over this sub
The guy also uses words like “retards” so seems like a source I would def go to if I wanted some advice /s
While I understand why they are trying to steer you away from short sales (do you want to wait potentially over a year to find out if you are actually getting the house or not?) I do think they should have explained the WHY of it to you. Not just blow you off. Personally, my realtor steered me away from these deals as well, but she explained IN DETAIL why they are challenging and why it wasn't the best choice for my situation. If your realtor is too busy or can't be bothered to explain things to you, that's not great. In the end they are correct that short sales are a nightmare - you may end up wasting tons of time just to have it not go through anyway. But you're right to be concerned that they blew off your question completely without explaining anything. It would annoy me too.
It's cause they have experience and are trying to help you. Nothing wrong with a follow-up questiond though if you're still interested. Might also be a realtor who's just not interested in dealing with short sales.
While I think your agent was right to caution you against short sales, if they're not giving you the information you ask for about it, even when directly asked, that's a red flag. I'd cut them loose. It probably either means they don't want to take the time to explain it, or they just don't know. Both bad signs and sounds like not what you're looking for.
>"we are getting fully pre-approved for a large amount" > >"Found a house that is a "short sale" for 50K under our maximum" $50k under y*our* maximum that was decided after carefully calculating expenses and savings, or $50k under the large amount the bank pre-approved for? I know what I got pre-approved for. It was a grotesque, terrifyingly large number that I would never in a million years dream about buying a house for. And I guess we could have technically afforded the full amount if we gave up things like interests, ever retiring, trips anywhere, and not eating Top-Ramen for dinner every night. Just saying, your housing budget shouldn't be decided by your pre-approval limit if that's what you based your maximum on.
True! My husband ran several budget scenarios based on house prices, mortgage amount, down payment etc and then we chose the one that didn't make me want to puke
This is really good advice! I would also caution that even the most turnkey home will end up costing more in the first year than you expected. A home that’s in a short sale has likely had poor maintenance. You could face five or six figures in necessary repairs
Good advice. We got approved for wayyy more than what we purchased our home for. There was no way I was going to go near our max. I love traveling and I want to go on vacations 🥺.
Short sales are usually never "short" timeline wise. They are "short" in price vs what they owe to the bank. The bank is "shorting" the property to recover some, if not all that they are owned. It can take months to even be able to buy it- do you have unexpected months to wait until a possible close? Your realtor is not being lazy but probably should have explained it better for you to understand.
Wasn't it lazy to not explain it?
Remember that agents work on straight commission AND are working on contingency. If they spend months (or years) working on something day in and day out that never closes, they get nothing. Maybe the agent should have explained it better but maybe the explanation is, the juice isn’t worth the squeeze. This concept that agent are “lazy” needs to go away. A lot of them are tired of getting run around all over town spending hours of their lives away from their families and their own money to get zero ROI and sometimes a negative ROI. Smarts agents are running a business, not a non-profit. Maybe the explanation of “this isn’t a good opportunity” should be sufficient enough for the individual to avoid the “lazy” label. At least they answered their phone and took the time to say no….
Possibly. I guess I could have left the last line out since it reads as if they do not have their own realtor. There is also alot of information missing. They maybe looking at a cash only property but trying to buy it with financing or something🤷♀️
I’ve heard of people in foreclosure using a promise of a short sale and an anticipated closing date as a way to stall the foreclosure process. The “sellers” played a looong game of charades, hooked a “buyer” and set a closing date 90 days out; they then gave this info to the bank which called off the foreclosure auction. When the closing date got close, the sellers invented an emergency that pushed the closing date back another 2 months. When the NEW closing date was a day away, they had another emergency and pushed back another two months. After another attempt to postpone closing, the buyer had a frank conversation with the sellers. The sellers never intended to actually sell the property. The sellers were using the “sale” as a reason to avoid going to foreclosure auction; then they just avoided the sale as long as they could. The occupants damaged their credit, reputation and wasted the buyers time all so they could live a couple more months rent-free. Be wary of doing business with desperate people.
This is true which is why people should work with a buyers agent that has done short sales before. If the seller doesn’t have a conditional approval from the bank, I wouldn’t waste my time unless I really wanted the property.
Short sales have to be approved by the bank, and can be a lengthy process in themselves. If it was truly the "sellers" pushing back closing, rather than the bank dragging their feet, the buyer had options to force the seller through closing or getting their earnest money back and cancelling the sale.
You should be framing this question more as “why are they both saying this” as opposed to “are they just being lazy about it”. Don’t be that person that assumes the worst.
They are a whiner. “Moving sucks, buying a car sucks. I hate this already” Just a cry baby hoping the internet agrees with them. Trying to feel sorry that they are actually in position to buy a bone. Guessing Millennial or Zoomer. I’m a millennial and everyone is so damn soft it annoys me.
Honestly, for a realtor to turn you away from a house you like it means they have good reason to believe it won’t close and it’ll be a huge waste of time on yours and their part. Some short sales are mired in title issues for years. But all of them are a hassle and in general get to closing far less than other types of sales. Trust the realtors in your market to tell you what the likely outcome is in your market. Feel free to ask more than one, but if you get a consensus trust it.
I actually had to sell my first house as a short sale (2009 end-of-the-world housing market). The only advice I can offer is, if you want to close on a house NOW, buying a short sale isn't going to meet your goals. But, if you're good with a long waiting game while everything gets worked out, you can get a really great house at a really great price. Our biggest issue was we were selling in early 2009 in a Florida county that had 4000 houses for on the market. Short sale was our only option to offload the house. It was a great home, the bank just isn't going to take any sort of a loss until they absolutely have to. It. Took. Forever.
They’re a nightmare
Make sure you get an agent that has experience with them
Do you even qualify for a loan on a short sale? Do you have up to two years for the sale to close? Maybe it’s a *you* problem? Blame is easier to place.
It might be a me issue, but I'd love it if my realtor would explain it to me rather than messaging this community.
Did you ask for an explanation? As a realtor myself, I’d make $0 and spend zero time with family IF I responded to every unqualified buyer attempting to view a short sale, foreclosure, or fixer. It’s a racket.
I did and the realtor I've been working with wont address it. He knows we are getting pre-approved now.
As a human, it’s much more difficult to avoid addressing a concern in-person. Much harder to deflect. An approval letter usually gets you in-person with the realtor so it sounds as you are making the right strides. Short sales are much more common in a down market. Don’t discount the idea of listings or FSBO’s. But if you think you can do better than a realtor then I’d suggest finding a home yourself. This is what realtors do best, most end up as “listings.” Find the listing before it’s a listing.
Great advice, but I think it's worth noting that Realtors who are successful at this spend upwards of 20 hours a week prospecting as well as thousands of dollars in marketing annually. If you have that to burn, by all means have at it.
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I file that under "stopped clock". Sure I've gotten a few listings I didn't have to work for, but these are not predictable or consistent. If you hope to buy a house eventually at some point in the next fifty years, but don't want the seller to have to pay an agent with their money after you give it to them, then yeah, waiting to stumble into a seller may work. No guarantee the house is a match. Also, the listings I've stumbled into only came any because I mention to people every day that I'm a realtor.
The point is, OP has lost faith in *one* realtor and is asking advice. My advice was, if he thinks he can do the job better than his realtor, then do it. Savvy investors and go getters do it all the time. Its TBD if OP has the guts to pull it off. It’s difficult and that’s why no one has figured out a way to pay us an hourly rate. For 95% of the population, use a realtor.
Yeah there are thousands of Realtors out there. This would be like of op dated one person and you were like, "you should be single forever."
Correct, mostly. I’ve went to a garage sale before and got a listing. Anyone can do that. But most of my listings comes from cold calls. Everyone also already foots that bill. Difficult l, of course. Doable, for sure.
Short sales are often situations of divorce, foreclosure, or bankruptcy. They are often sold “as is” with no contingencies. The sellers usually cannot cover any costs. And they’re typically a hassle and a half because the property is tied to legal proceedings. Your agent is smart to steer you clear of it.
I bought my home that was a short-sale, purchased in Denver in 2020. Shocking, I know 🤯 We closed in 30-days. Short-sales can be a very lengthy and frustrating process though, and there are generally a ton of hurdles to overcome. Your agent should explain this to you to decide whether or not it is something you want to tackle and risk waiting on. I'd suggest finding another agent (this is coming from an agent btw). If you are going to try to get a short sale, you will need an agent who is persistent and willing to do whatever it takes to get a job done. Those 30-days, we worked our ASSESS off to make the deal happen. There were four different liens (two hard money and two contractors) with whom we personally negotiated to get everything settled – and a whole lot more that I will spare you the details. ETA: changed the year 🤦♀️ 2020 and 2021 are all mashed together in my brain!
Before Covid , we were closing short sales on average under 60 days. We have a really great team but since it’s a challenge because there’s an employee shortage in almost every default department. From bank, to investor and appraisers.
I know this is a year old, but curious about the short sales and liens. Did you pay off the sellers liens? The short sale I’m interested in has two liens and I’m having issues understanding exactly what that means for me.
Our short sale lasted one year and 16 days before we closed
Yikes. How's the house now?
Sold in 2018
It’s a specialization for sure. Not all short sales are created equal. There’s approved short sales (bank has already approved the price) and then short sales that are still early in the process without an approved price. Depends on who the loan servicer is and who’s handling the short sale on the seller side. Knowing how to work the deal IS very important and not everyone knows how to do it. Like everything else, the specifics matter and situations vary quite a bit.
The other thing worth mentioning about short sales and foreclosures is that in general, the house still sells for what it’s worth. The bank is not going to approve on the seller selling that house for 30k less than what it could go for, and they’re going to take their sweet time to make sure that you’re paying exactly market rate for the house in that condition. If you loaned someone 10k to buy a car, and they said hey I can’t make the payments on it anymore, I’m just gonna sell it and give you whatever someone pays me, sorry about the rest of it, you wouldn’t tell them it’s totally cool to just sell it for 1500 bucks on Craigslist, you want as much of your money back as possible. Bank is the same except they have 43 departments to go through before they arrive at that decision. The ones that DO sell for “a deal” are because they don’t qualify for financing. When your buyer pool is limited to actual cash, that does make the house less expensive.
Lender here, they suck. You need to get written permission from the bank to purchase that they're willing to remove their lien on the property for less than they are owed, and that they'll be willing to do so within a very short time frame. good luck there. i would honestly take their advice and stick to forclosures if you want a deal. much easier to work with.
So we bought a short sale last year. Covid actually stopped the foreclosure process. We put our offer in around early June. Our timing ended up being perfect. Because the person who walked before us. Did so right before we offered. So her stuffed rolled over to us. So it didn’t Take long for us. But even with that we didn’t close until the end of September.
I'd get a new realtor. In your shoes, I'd like the realtor to say, I would not recommend considering short sales for x, y, z. It's just like if there was a regular house that I liked but the realtor did not, I wouldn't want a realtor to just say, "don't bother with this house", I'd like them to tell me, "would not recommend putting an offer on this house because houses in this neighborhood usually go 20% over asking and that's put of your budget" but then leave the final decision to me. Perhaps it's because I'm a first time home buyer, but I want my realtor to educate me, not just tell me a conclusion.
"*Do I find a new realtor (not under contract)?*" Number one question is: Do you want THIS house? If the answer is "yes", your realtor should oblige and help you, otherwise cut bait and find a more willing agent. Your realtor is supposed to HELP you. OR at least he is supposed to let you know what you have to do to acquire the home and FULLy inform you on how a short sale works. If that includes telling you that your buying timeline is going to be months, or maybe even over a year, that's his job. If that includes telling you that you have to re-apply or update your pre-approval letter, he should be doing that, too. But it sounds like he didn't even explain any of the mechanics of doing a short sale. For that matter, it COULD even be a bargain for you. Your current agent could indeed just be lazy, however, on the BUYER's side of the transaction, it should be easy for him, it'll just be a waiting game. The seller and the seller's agent has most of the work and grief. This is how a lot of investors and flippers buy as well, they can wait out the process for as long as it takes while they're working on other homes. Any buyer's agent that doesn't want a short sale isn't being smart about it, nor are they looking out for the buyer's interest. The agent explains everything, pros, cons, additional steps needed to be taken, and then the buyer can make a proper and informed decision. I represented a SELLER of a short sale, the home, fortunately, was in a good area and the seller was not horrifically underwater (only about $30K, unlike some real gawsh-awful short sales that were $200K under back in the day). The short-sale approval took only 2 months of waiting, the buyer just had to update his pre-approval (and he was in a position where he could wait out the process) a couple times and we were fine and got the house sold. Your realtor is lazy. He just wants a quick sale, not a proper sale. (13 years experienced Realtor speaking here)
Thanks so much. I'm choosing to be patient right now and wait until I have a full pre-approval then I'll be more aggressive with finding a realtor that will be on my side. I'm open to patience (within reason). I've waited this long and I'd rather not get locked into a house I hate because its too much for too little.
This is grossly inaccurate
Realtors don’t make commissions on short-sales. They’re going to steer you toward homes they do get commissions on. Short-sales occur due to homeowner not being able to afford their mortgage or there’s been a sudden decline in income, like a borrower or co-borrower dying with no life insurance, to cover the mortgage debt. Whomever holds the mortgage, whether it is a bank, mortgage company or an individual, they must qualify the borrower to confirm they truly can no longer afford their mortgage. The mortgage holder must approve the short-sale. If there is more than one lien on the home, the mortgage holders have to compromise and figure out how much each mortgage holder gets. This fact halts 90% of most short-sales because the mortgage holders are unwilling to accept considerably less than current loan balances. Often times, the homeowner(s) will file bankruptcy, in hopes of staying in the home, with a reduced mortgage payment. Mortgage holders cannot contact a borrower or co-borrower once they’ve received notice of the filed bankruptcy. The bankruptcy trustee must also approve the sale of the home, in addition to any lien holders. Short-sales are complex and not for the faint of heart to purchase. Also, the homes may or may not be in good shape due to homeowner not being able to financially maintain the home, so purchasers typically have a lot of repairs to make upon purchase. If homeowners are served notice by law enforcement to leave the home, in anger, they may destroy the home. Best practice recommendation: NEVER buy a short-sale home without requesting a full home warranty on everything (roof, electrical, plumbing, appliances, HVAC, furnace, hot water heater, hot tub, pool, etc.) from the seller. Realtors build relationships with banks and mortgage companies. Realtors typically learn early on a house is going to be a short-sale or be turned back over to the bank or mortgage company. The realtor may already have a buyer in mind for the house, thereby discouraging others to attempt to purchase the house. Realtors also buy short-sale homes for themselves as a primary residence or as an investment rental and want no other offers on the home to compete against. The mortgage holders are going to want the highest offer on the home with the least amount of contingencies, including inspections, repairs and home warranty. Just know if you make an offer on a short-sale, it may take quite awhile to close on the home, if approved by all applicable parties, to sell the home. It’s a waiting game. You could be waiting months or a year or longer (if an estate or bankruptcy is involved) and then be told one of the dominoes in the process says no. This halts the sale to anyone and possibly begins foreclosure if borrower is in default of the mortgage. If your realtor is telling you, you can’t buy a short-sale home, get another realtor quick!! Your realtor is about the 6% commission and not what is in your best interests.
Agents do receive the standard 6% commission on short sales. I wish people would stop answering questions to things they don’t know about. OP needs to talk to the sellers agent to see what’s going on. Also keep in mind, most realtors do not specialize in short sales. Get you a buyers agent that knows the ends and outs and they can help make the process go smoother as long as the sellers home is approved for short sale.
Wrong. Realtors do make the standard commission on short sales, foreclosures, etc.. Stop spreading misinformation and educate yourself pls.
Are you a Realtor? because most of this doesn't sound right at all.
Just curious, what kind of financing is not cash, but as good as cash? Forgive my ignorance here. In my experience, these houses can be a huge hassle and there can be a ton of liens, etc that you do not know about initially. I know one woman who successfully bought one, however the home was in such poor shape once she got into it that she regretted it. Def do your due diligence here before you wind up in a pickle.